There’s a short but not-so-simple question facing Vietnam’s technology startup fans: Now, what?
The communist country was not immune to the startup craze that swept the globe, but much of the early period was spent talking about tech and all the local potential. In what could be called the next phase of the craze, Vietnam now hopes to go beyond just talking. The focus now is on getting entrepreneurs to deliver on their pitches and meet concrete benchmarks, whether that’s to turn a profit, expand overseas, or find “exits” for their businesses, such as through acquisitions.
At a basic level, Vietnam has what's needed to be a place prime for startups. Citizens have high literacy rates and math proficiency, which eases the path to creating an army of programmers for the economy. The country also has a balance that combines, on the one hand, a large consumer market on par with those of Thailand and the Philippines, and on the other hand, a lower level of development with high growth rates on par with those of Laos and Cambodia. And the low cost of things like wages and Internet plans allows people to establish companies at minimal expense.
But these are only ingredients, not, so far, action toward a modern culture of enterprise.
“Vietnam usually does copy-paste,” said Lam Tran, CEO of the startup WisePass, adding that locals should move past the model of copying a business idea from a foreign country and pasting it into the domestic market. “We don’t know how to internationalize.”
WisePass, an app that connects monthly subscribers to bar and restaurant deals, launched in Ho Chi Minh City with plans to cover seven countries in the near future.
Taking advantage of cross-border ties is one effective, increasingly popular strategy, startup aficionados say. For one thing, Vietnam has a huge postwar diaspora, known as Viet Kieu, who help connect the Southeast Asian country to investors, advisers, and developers abroad. For another, the tech scene inside the border is more cosmopolitan than ever.
To give one example, the Vietnam Innovative Startup Accelerator (VIISA) has invested in 11 companies for the second batch of what it calls “graduates.” All have domestic links, but have partners operating in locales as disparate as Ukraine, South Korea and France.
Sangyeop Kang, investment officer at VIISA partner Hanwha Investment, said he’s “delighted about the diversity” of this sophomore batch.
“The foreign teams were able to expand their business in Vietnam, while helping Vietnamese companies with global insights,” Kang said. “This is a step forward for the ecosystem."
In a sign of official interest, the government has a carve-out for startups in its Law on Supporting Small and Medium-Sized Enterprises, which will take effect Jan. 1. The law offers young companies support with co-working spaces, technical equipment, intellectual property training, and low interest rates, among other things.
To do more than copy and paste, new businesses are contemplating how to outfit themselves for Vietnam. The startup But Chi Mau, for instance, makes games that tap into the unquenchable thirst for education, while MarketOi deploys motorbike drivers to let customers customize their food deliveries.
“The question is how to differentiate ourselves,” MarketOi founder Germain Blanchet said, before proceeding to answer that question: “This is with flexibility.”